MPS corporate governance framework update

Report: 9
Date: 10 December 2009
By: Director of Resources on behalf of the Commissioner

Summary

This report provides a progress update on the Metropolitan Police Service (MPS) Corporate Governance Framework. It includes updates on the areas identified by the MPS Annual Assurance Statement (AAS) in 2009.

A. Recommendation

That the report be received.

B. Supporting information

Current corporate governance arrangements

1. The MPS continues its drive to achieve excellence in corporate governance. It uses an established ‘temple’ model of corporate governance, approved by Management Board (see Appendix 1) that reflects current good practice.

2. The MPS corporate governance work programme consists of a number of work streams that have been identified through a gap analysis against elements of the CIPFA/SOLACE framework: “Delivering Good Governance in Local Government” the Interim Guidance Note for Police Authorities & Forces in England and Wales (2007) and as significant governance issues in the MPS Annual Assurance Statement. This work programme is managed and monitored through the MPS Service Improvement Board (SIB) with regular progress updates to this Committee.

3. We are currently in the process of reviewing the MPS corporate governance framework, in liaison with MPA officers, with the aim of ensuring MPS corporate governance arrangements are appropriate and up-to-date. This will result in an improved format of the quarterly report to this Committee in 2010/11.

Summary of progress

4. The status of each work stream is provided below with more detail set out in the Progress Update section later in the report.

Progress update

Pillar One: Organisational structures & processes

Embedding Risk Management

5. There is ongoing work to implement the corporate risk management strategy across MPS. This entails:

• Working in consultation with the Business Group Risk Co-coordinators to further develop and adapt the risk management framework. The first part is to jointly develop a maturity model for risk management which will be used to assess how well risk management is embedded in each Business Group and to develop with them an agreed improvement plan.
• Working with colleagues in risk related disciplines to further integrate the various risk management activities - including projects & programmes, partnerships, IT security, business continuity and Health & Safety.
• Working with colleagues to further embed risk management into the day to day processes of the MPS, particularly performance management, decision making and planning. Specifically:
  • Performance management - health indicators have been established for risk management which is linked to the assessment of maturity of risk management within each business group.
  • Planning - working with the business groups to identify risks associated with the delivery of their plans and ensuring that those risks are captured within the Business Group risk register.

Implementation of Developing Resource Management Programme

6. The Developing Resource Management (DRM) programme, launched in July 2008, specifically focused on delivering efficiency and control projects primarily in the areas of Finance, Procurement and Strategy and Improvement. The first phase of the programme is coming to a close, with most work streams moving into business as usual.

7. The Contract and Compliance Management (CCM) and Purchase to Pay (P2P) activities have now been combined into one Procurement work stream, to energise the integration and acceleration required. However, for ease of reference to previous reporting, the updates for the individual CCM and P2P work streams are shown below.

8. A report about increasing contract compliance was presented to the Finance Resources Sub-Committee in November, working with the MPA auditors to achieve system audit certification.

9. CCM - Through successful implementation of system controls to ensure purchase orders reference a contract, spend that is referenced within a contract has increased by over 7% in the last quarter. A contract compliance report is currently being developed to enable the business to monitor contract usage and compliance. It is planned that this report will be completed and available for the business by the end of 2009.

10. The P2P work stream has achieved its stretch target of 80% corporate-wide compliance rate. This is a significant increase on the level of compliance in February 2009, which as an average for the organisation was at 51%.

11. Procurement Services continues to work with business groups to identify potential saving opportunities through Strategic Procurement Plans (SPPs). Further work will be undertaken in the second phase of DRM to stretch the savings targets for SPPs.

12. The full technical solution for the Scheme of Delegation was launched successfully on 19 October 2009. The system which is to go live has been supported by ongoing delivery of comprehensive training for over 400 users. The Scheme of Delegation Full Solution will give the MPS consistent approval limits across all business units and across the whole 'Purchase to Pay' process. Further work is underway to develop the wider scheme of delegation, due to be in place for the start of the new financial year.

13. The Finance and Resources (F&R) Modernisation review is drawing to a close following the successful go live in TP on 19 October 2009. Service level agreements and key performance indicators for the new F&R function have been shared with the F&R user group, project board and DRM steering group. These will be finalised in November 2009. It is proposed that further review and reorganisation of F&R could lead to additional cost savings and so under DRM2, a second review of Finance and Resources is being considered.

14. The Partnerships work stream is now being managed as business as usual, embedding the products created through DRM. The newly appointed Head of Partnerships in S&ID recently launched the Partnerships Best Practice Network with over 200 members, to share learning across the MPS in a systematic way, and to assist and facilitate partnerships. This network’s hub, the Partnership Central Steering Group (PCSG), meets quarterly and acts as gatekeeper for the rest of the network. A paper on the group’s approach to partnerships was discussed at the Communities, Equalities and People Committee (CEP) Committee 12 November 2009.

15. With the first phase of DRM coming to a close, new work streams for inclusion in DRM2 are being developed, these are:

• Corporate Landlord (CL)
  The objective of the CL work stream is to optimise the use of the MPS Estate including disposal of surplus accommodation where appropriate. The introduction of a CL approach will lead to common standards in key cost areas.
• Development of SAP
  To establish and embed SAP as a corporate platform and implement a suite of specific system developments, initially in respect of capital budgets and monitoring and asset management.
• DRM2 Procurement Services
  The work stream will bring together four key strands of work, with the aim of:
  • Moving into effective contract management and improve spend under contract
  • Completing work currently underway around Purchase Order compliance and locking in the benefits gained so far
  • Further increasing procurement capability across the MPS
  • Enabling, delivering and sustaining the saving potential of SPPs
• Finance and Resources Modernisation (second wave)
  Learning the lessons of the F&R review and having regard to the increasingly restricted financial landscape, consideration is now being given to moving to a more centralised model for the delivery of F&R functions across the Service.

Provision of detailed information on emerging market hotspots, especially around specialisms and specialist professionals

16. A small number of specialist / technical roles in the Directorate of Information (DoI) have been identified where MPS pay arrangements lag behind the market. Proposals on new salary arrangements and flexible starting pay have been made to the trade unions to address the issue and discussions are continuing in the Terms and Conditions forum.

17. The new grading and pay arrangements introduced in 2008 for Procurement roles are operating satisfactorily and have enabled the Directorate of Resources (DoR) to attract a range of talent from the market.

18. Discussions between management and trade unions on grading and salary structures continue in Property Services and Forensics. There is some evidence of market pressures in a small number of Property roles, where it may be necessary to adopt or adapt the approach of the DoI on market hotspots.

Review of Expenses Policy

19. Consultation is now complete and the Policy Workbook and Equality Impact Assessment are in draft for submission under the current MPS process for policy implementation. This process will take a further two months to complete and the revised implementation date is January 2010.

Management Board operating framework & scheme of delegation

20. The revised Corporate Decision Making Model was agreed by Management Board in October. There is now an implementation plan to link the roll out of the revised model to the work on refreshing the MPS scheme of delegation and establishing a new performance management framework. There will be a phased introduction of these products until full roll out is achieved by the end of March 2010.

Performance Management Framework (PMF)

21. The concept of the Performance Management Framework (PMF) has been presented to and approved by Management Board. The PMF was also agreed by Management Board in principle as the way forward in October. It was agreed that the monthly management report and the quarterly management report will be presented to the relevant Board, which will be defined as part of the CDM work.

22. Current plans are to share a first draft of period 6 figures of MMR to Performance Board in December (subject to the model being agreed). Period 8 is to be reported in January to Performance Board.

Organisational Learning

23. Following agreement at September’s Management Board, £250k has been built into HR’s (Organisational Development Team) budget submission. The budget will be used to recruit a senior manager (and appropriate support) to work with DoR to ensure full, accurate and timely sharing of learning points, within and between all business groups, using the new MMR process. Further scoping of the process is underway.

Non-compliance framework

24. A framework timetable which outlines the work to be completed into 2010-11 has now been issued. Workshops, which will outline responsibilities for asset management, commenced in November.

Review of MPS Environment Strategy and development of Corporate Social Responsibility (CSR) / Sustainable Development Strategy 2010-13

25. The MPA/S Environment Report 2008/09, (including corporate health indicators) has been published on the MPS website. Work has been ongoing to provide CSR input to the MPS Business Plan & Budget, which was submitted to the Mayor in November. A summary is also being prepared for the Capital Plan and the Policing Plan.

26. Initial stages of the development of the CSR strategy for 2010-13 have begun with review of Mayoral and MPS strategies. A stakeholder engagement plan will be developed, but principles of the CSR strategy will cover environmental and social aspects of CSR for the MPS.

Service Improvement Plan

27. The Service Improvement Plan has been developed into four productivity themes:

• Supplies and Services
• Shared Services
• Lean Management
• Compliance

Each of the themes is led by a portfolio co-ordinator who is the subject expert and a single point of contact for those developing work in any of the four areas.

28. The Director of Resources briefed MPA members on the SIP on 22 October and the SIP was the key focus of this year’s annual MPS Service Conference.

Business charge card

29. Barclaycards were introduced as the new business charge card in May 2008, with tighter criteria for the cardholder to account for their expenditure (within 30 days). Table 1 below shows the number and value of those items of Barclaycard expenditure un-reconciled as at 31 October 2009.

Table 1 – Unreconciled Barclaycard expenditure at 31 October

*Seventy-eight cardholders in table 1 above had both current and overdue debt.

30. The average age of the 717 returns processed in October 2009 was 45 days. Against this average, 82% of October processed returns were completed within 60 days of the statement date, i.e. before the end of the one to 30 day overdue period. The reasons for the delay in processing some reconciliation to completion include:

• officers outside the Metropolitan Police District (MPD) are unable to submit claims in a timely manner and
• the time taken to approve and process claims, for example time in transit, return of forms to cardholders to remedy errors, omissions and/or, provide fuller explanations to supervisors.

31. The total spends on the Barclaycard scheme in October 2009 is £389k, 16% lower than the same month last year.

32. The additional controls put in place on MPS business charge cards include:

• reduced time to account for expenditure
• imposition of annual spend limits
• greater local control over cards
• better local visibility through improved management information and
• tighter control over cash withdrawals

33. These controls continue to work well, with fewer items not accounted for in time by cardholders and quicker, more effective, management intervention/escalation when cardholders do not account for expenditure in accordance with the timetable or the applicable rules and procedures.

34. There are presently three cardholders whose use of the card is under further review for possible abuse. The member of civil staff dismissed earlier in the year for abuse of his card has received a criminal caution for theft.

Pillar Two: Reporting and involving the MPA & Stakeholders

Review of all forms of public engagement and consultation

35. Management Board has agreed to establish a small project team in conjunction with the MPA to revise the joint MPA/MPS Community Engagement Strategy. The Project Team will be chaired by Deputy Assistant Commissioner TP Capability and Review and members will come from across business groups. The first meeting for this new project team was held in November.

36. The key issue for the strategy will be how to improve the effectiveness of our approach to community engagement at a time when our resources are under pressure. There is a need to coordinate our engagement activity more effectively and to share and use the outcomes more widely to maximise our investment in our community engagement work. p>

3737. Work is underway to identify the joint MPA/MPS team, develop a detailed project plan, conduct background research and begin some initial consultation work. The project aims to deliver the new MPA/MPS Community Engagement Strategy over the next six months.

Safer Neighbourhoods panel training and business / youth engagement

38. The third and final stage of Ward Panel Training is now underway. This session is about providing the ‘Chairs’ with the necessary skills to run a meeting. The trainers have designed a programme that incorporates role play around setting an agenda in holding the Safer Neighbourhood (SN) Sgt to account with regard to performance and selecting priorities. This phase will be completed in the New Year and a full review will be undertaken.

39. Under the Presence strand of the five Ps, 32 town centre teams are providing at least an additional four officer patrols per day. Haringey, Westminster, Southwark, Brent, Lambeth, Greenwich and Lewisham are providing an additional 10 police patrols per day. From April 2009 to September 2009 this equates to 295,021 hours of police patrol in our primary town centres. p>

40. The joint development of a MPS/City of London Police Business Policing Model is in progress. An ACPO sponsored conference on Business Crime was held in Greenwich which outlined progress to date.

4141. The annual MPS Youth Survey is currently underway. A letter inviting all head teachers of secondary schools to take part has been sent. We aim to obtain the views of at least 500 young people per borough (16,000 MPS wide) that will be fed back to individual boroughs to incorporate into local policing plans/youth priorities.

Pillar Three: Standards of behaviour

Enhanced MPA / MPS Fraud and Corruption Awareness Strategy

42. The final report on Raising Fraud Awareness is currently awaited from the Audit Commission. The MPA Director of Audit, Risk and Assurance has undertaken to progress this matter.

43. Part one and two of the Special Notice which refers to the Prevention and Detection of Fraud are currently under revision in discussion with the MPA Fraud Prevention Officer and will be re-published in due course. Part three of the notice regarding recovery of salary and other overpayments was revised and replaced by guidance published in notices in August.

Introducing the Equality Standard

44. Following the Equality Standard for the Police Service (ESPS) trials earlier this year, a business case will be considered at the Diversity Board in December. If agreed, roll out across the MPS is planned for January. The ESPS will be included in the launch of the Diversity and Equality Strategy in December. It should be noted that the ESPS is the tool that will support the delivery of the Diversity and Equality Strategy and this is the reasoning behind both products being launched at the same time.

C. Race and equality impact

The model of corporate governance set out in this report is based on the principles of openness; integrity; accountability and equality. The development of the framework therefore should have a positive race and diversity impact by ensuring that these principles inform the way in which MPS operates. Furthermore, improved communication of the corporate governance framework aims to help staff understand how to apply these principles in their day-to-day work.

D. Financial implications

The work streams identified will be delivered within approved budgets.

E. Legal implications

1. The MPA are under a statutory duty to prepare and publish an Annual Governance Statement (AGS), under regulation 4 (2) of the Accounts & Audit Regulations 2003, as amended by the Accounts & Audit (Amendment) (England) Regulations 2006. The AGS is a general certification about governance issues, which is the primary responsibility of the MPA as police authority.

2. In order that the MPA can discharge its statutory duty referred to in paragraph 1 above, the MPS provides its certification to the MPA by submitting an Annual Assurance Statement (AAS), as recommended by CIPFA / SOLACE guidance “Delivering Good Governance in Local Government-Interim Guidance Note for Police Authorities and Forces in England and Wales (2007”) (“The Guidance”), which demonstrates how aspects of governance have been implemented within the police force.

3. The Corporate Governance Framework provides the supporting information which evidences that the MPS will ensure it has robust systems in place that demonstrate it is adhering to the strategic direction set by the MPA, and is delivering good governance through the delivery of many operational and financial aspects within a delegated framework, in accordance with Guidance and best practice.

4. Compliance with the Corporate Framework will also assist in raising standards, reduce risk of legal challenge and build public confidence by ensuring the MPS operates in a transparent manner.

F. Environmental impact

The work streams identified have varying levels of environmental impact / benefits.

G. Background papers

None

H. Contact details

Report author: Marie Rune

For information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

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